Buy Your First or Next Home With Common Sense---You'll make your grandparents proud

Ronald Reagan said "Recession is when your neighbor loses his job. Depression is when you lose your job. Recover is when the President loses his job."

Maybe this is and maybe this isn't the 1930's all over again but lessons learned in a depression are lessons worth adopting in a recession or post recession economy.  Ingenuity, saving, recycling, stretching a buck, are all common-sense attributes of Americans who lived the hard and bitter times of the 20th century. Not much more than a generation removed, we find ourselves right back in the midst of time when the only fear we should have is fear itself. I'm suggesting we use the principals of our father's fathers to walk through the fire of challenging times.

The following points are suggested as a way to take control and build some equity in your first or next home ownership. The plan allows for you to be interdependent. You will use your earning power, your self control, your wisdom and the government's cash incentive to grow your real estate equity.

1. Qualify with a local mortgage lender for a purchase based on a minimum of 5% down on a 15 year mortgage---this is critical. You will buy only what you can afford on a 15 year amortization.
2. In case I haven't made the point clear enough--Borrow only a 15 year mortgage. Do not use 30 year fincing. We are working on building our own equity.
3. Look only at homes priced within and up to 5% above your qualified price point.
4. Focus your search on the best location within the neighborhoods you prefer--all locations are not the same. Stay off of main roads, busy streets, and avoid houses with no back yard.
5. Judge the home by its location and layout. If the outside is tacky that's OK. Others will discount the house and you can improve it. Location can't be improved but appearance can.
6. You will make offers only at prices you can support with two comparable sales in the neighborhood in from the last 90 days. You aren't looking to get a property below fair market value, you just want to get the best location you can afford at no more than fair  market value.
7. To determine fair market value you will depend on the value established by the Appraiser, not the assessor, or the owner, or the owner's Realtor.
8. If the kitchen and baths are not up to your expectations, plan to improve them--money spent here has a better than even chance of coming back to you when your location is superb.
9. In your offer, exclude the appliances.
10. Think Energy Tax Breaks  You are going to improve the home with energy efficient appliances and mechanicals.
11. Your Tax Credit of : $6,500.00; $8,000.00 combined with your energy tax break credits will be SAVED. You will open a tax break bank account.
12. Appreciation will not be expected, anticipated, or wished for---but if there is appreciation you will never spend it. Not for fun or emergency---it's not earned therefore never spent.

In seven years you will have saved and earned a favorable chunk of equity and established some life changing values. It won't be the equity but the values which deliver you from being a victim of the next great depression or recession. It's sure to arrive as soon as we forget the lessons of the past once again.